Central Asia’s Little Problem of Governance

Today’s New York Times and Christian Science Monitor pretty much argue that Kyrgyzstan is coming apart at the seams. “Security vacuum!” screams the Monitor, which quotes Russian experts to the effect that there is now “an open invitation to chaos or Islamist extremists.”

Actually both papers are in good company. Russian president Dmitry Medvedev argued last week that “the risk of Kyrgyzstan splitting into two parts—north and south—really exists.” “Kyrgyzstan,” Medvedev said, “is on the threshold of a civil war” and “terrorists and extremists of every kind will rush into this niche.” Medvedev’s punchline? “Instead of Kyrgyzstan we get a second Afghanistan …” And he’s hardly alone in that view. Kazakhstan’s president, Nursultan Nazarbayev (who just played a central role in extracting the deposed Kyrgyz president, Kurmanbek Bakiyev, from that country) argues that Kazakhstan’s diplomatic efforts averted a Kyrgyz civil war.

Frankly, all this breathlessness leaves me a little cold. We’ve been hearing dire predictions about Central Asia for two decades. And nineteen years after independence, it’s worth recalling that some analysts believed these five countries wouldn’t make it even this far.

I’ve also heard this refrain before. Back in 2006, when Turkmenistan’s president, Saparmyrat Niyazov, died, I was serving a stint as the deputy assistant secretary of state for Central Asia. Within 24 hours of Niyazov’s death, I fielded a rash of phone calls from analysts predicting Turkmenistan would erupt in violence, perhaps even fall apart. But no such thing happened. And while Turkmenistan may be one of Central Asia’s stronger states—and I know disaster did happen in Tajikistan, which collapsed into an absolutely horrible civil war in the 1990s—Central Asian states (and especially Central Asian governing elites) have proved rather more resilient than the most dire predictions suggest.

But I’d keep an eye trained on the economic and governance fundamentals, too.

Just take Kyrgyzstan. As I argue here, here, and here, Kyrgyzstan is a (very) poor country, and it could really stand to get back to focusing on some of these fundamentals. These were pushed to the margins over the last five years, with the landscape dominated by elite political maneuvering.

It’s worth watching four things:

First, are Central Asian governments getting their macro- and microeconomic fundamentals right? There’s an economic element to some of the underlying political tension in Central Asia. Many are experiencing tough economic circumstances. And the World Bank’s Doing Business report, which measures both macro- and microeconomic fundamentals, ranks Uzbekistan 150and Tajikistan 152out of 183 countries in the world compared to, say, Turkey at 73and Pakistan at 85 (although Kazakhstan and Kyrgyzstan score much better). Good policies ultimately translate into better opportunities—and the record is really very mixed across the region. Eventually, weak banks, inflation, and debt will fuel broader economic and social tensions.

In fact, even Central Asian countries that have stronger states and economies than Kyrgyzstan’s have experienced real economic troubles. Kazakhstan, for example, has outperformed nearly every country that emerged from the former Soviet Union. Back in the 1990s, it got some of its macroeconomic fundamentals right. But Kazakhstan’s banking sector became heavily dependent on foreign debt, and it suffered the consequences in recent years. Meanwhile, over in Uzbekistan—which has adequate infrastructure and a lot of potential—there’s been less foreign direct investment per capita than in its neighbors, despite its strategic location and other advantages. Policy choices have a lot to do with that.

Second, how responsive are government institutions? The five Central Asian countries are a diverse lot, but, broadly speaking, state institutions in the region aren’t particularly responsive now. Put differently, then: do people have a growing or weakening faith in government’s capacity to address their daily needs? This is tough to measure, except anecdotally, but I’m betting the answer is “not especially,” and we’re seeing some of the results in the recent events in Kyrgyzstan.

Third, is governance predictable? This touches corruption but also legal systems. It’s striking, for instance, that even President Medvedev argued that this was a big reason for Bakiyev’s downfall in Kyrgyzstan. Medvedev called Bakiyev’s regime “corrupt” and “clan-based.”

Fourth, how broadly based are economic opportunities? Unfortunately, there are a lot of haves and have-nots in Central Asia. So one challenge will be to level the playing field so that economic opportunity arrives for a much broader segment of society. Some countries are doing better than others. But this will certainly be among the biggest challenges for all five countries over the next three to five years. Watch this space very closely.

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Asia Unbound examines political, economic, and social developments in Asia and the region’s growing importance in global affairs. Named one of the top fifty blogs following Asian business by Bschool.com.

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